The IS Curve ________ When the Real Interest Rate Increases

question 12

Multiple Choice

The IS curve ________ when the real interest rate increases.

• A)shifts to the right
• B)shifts to the left
• C)shifts up
• D)all of the above
• E)none of the above

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Definitions:

Ellipse

A plane curve encircling two centers where the total distance from any point on the curve to the two centers remains unchanged.

Center

The midpoint or central point of a geometric shape, or a point that is equidistant from all points on the circumference of a circle or sphere.

Hyperbola

A type of smooth curve lying in a plane, defined as the locus of all points that satisfy the equation of the difference of distances from two fixed points (the foci) being constant.

Graph

A visual representation of data or mathematical functions, often plotted on coordinate axes.